Starbucks will close 250 stores in North America this week as part of its second round of closures.

Starbucks Corporation is set to close 250 stores across North America in a strategic move aimed at restructuring its retail presence. This round of closures marks the second significant adjustment since Brian Niccol took on the role of Chairman and CEO in 2024. Last year, the company executed a more extensive plan that resulted in the closure of 627 stores in both North America and Europe, alongside layoffs affecting approximately 900 non-retail employees.

In a communication addressed to employees, Chief Operating Officer Mike Grams articulated that the closures are a response to financial underperformance and a determination that certain locations fail to deliver the quality experience Starbucks aims to provide to both customers and staff. While the company has disclosed its intentions, specific details regarding the stores slated for closure and their geographical distribution remain unspecified. Additionally, the number of unionized locations impacted by this initiative has not been clarified. Since late 2021, over 700 U.S. Starbucks locations have successfully voted for unionization; however, the company has not endorsed these efforts, and negotiations between Starbucks and union representatives for a labor agreement remain unresolved.

Despite the impending closures, Starbucks is actively engaged in an initiative to enhance the overall customer experience. According to Grams, the company is in the process of retrofitting its North American stores to create a more inviting atmosphere. The goal is to complete improvements in approximately 1,500 locations by the end of the fiscal year, which is set for September 30. This modernization strategy aims to enrich the appeal and functionality of stores, thereby promoting better performance overall.

Grams has reassured employees of the company’s commitment to expanding its presence in North America, indicating that while some stores may close, there remains a focus on growth. A key aspect of the closure plan includes efforts to transition employees to nearby locations whenever feasible. For those who cannot be placed in new positions, the company has promised severance support.

In recent months, Starbucks has continued to streamline its operations; in May, the company laid off an additional 300 corporate employees and shuttered several underperforming offices in the United States. Following the announcement of the upcoming store closures, Starbucks shares saw a modest increase of less than 1% in premarket trading.

As Starbucks navigates these changes, the company’s leadership underscores the importance of adaptability in a competitive market while remaining focused on enhancing customer satisfaction and employee experience.